EXHIBIT 4.3
EMPLOYMENT AGREEMENT - X.X. XXXXX
EMPLOYMENT AGREEMENT
THIS AGREEMENT is dated for reference October 23, 2002,
BETWEEN:
XXXX XXXXX, of 000 Xxxxxx Xxxx,
R. R. #0, Xxxx Xxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Executive")
AND
XXXXX INDUSTRIES LTD.
(the "Corporation"), having its registered office at 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx
WHEREAS:
A. The Corporation is engaged in the business of integrated forestry
operations, including logging, sawmilling, and the production of both
kraft and dissolving pulp (collectively the "Business");
B. The Executive has served as the President and Chief Executive Officer
of the Corporation since February 1, 2001 and prior to such date served
in other capacities with the Corporation since January 10, 1982; and
C. The Corporation wishes to enter into this Agreement for the continuing
employment of the Executive as President and Chief Executive Officer;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
representations, warranties, covenants and agreements hereinafter contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto covenant and agree as follows:
1. NATURE OF AGREEMENT
1.1 POSITION
The Corporation shall continue to employ the Executive as President and
Chief Executive Officer, and the Executive agrees to continue with the
Corporation in such capacity, all upon and subject to the terms and
conditions of this Agreement.
1.2 DUTIES AND FUNCTIONS
The Executive shall be responsible to and shall report to the Board of
Directors of the Corporation (the "Board"). The Board may vary the
conditions, duties and services provided by the Executive from time to
time according to the operational and other needs of the Business,
provided that his duties will continue to reasonably reflect the
responsibilities conferred by this Agreement. The Corporation expects
the Executive to produce timely and good quality work, acting in a
competent, trustworthy and loyal manner. The Executive agrees to carry
out, using his reasonable best efforts and in a manner that will
promote the interests of the Business, such duties and functions as the
Board may request from time to time. The parties
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acknowledge that the Corporation has heretofore established committees
that have assumed primary responsibility for some of the above duties,
responsibilities and functions.
1.3 TERM OF AGREEMENT
The term of this Agreement shall commence on October 23, 2002, and
shall remain in force until this Agreement is terminated pursuant to
Article 3 hereof.
1.4 FULL TIME POSITION
Unless prevented by ill health, the Executive shall, during the Term,
devote his full business time and his care and attention to the
Business.
1.5 GOOD FAITH
The Executive shall well and faithfully serve the Corporation and use
his reasonable best efforts to promote its interests.
1.6 SECURITIES LAWS
The Executive acknowledges that the Corporation is a public company
whose shares are or listed for trading on the TSX Venture Exchange. The
Executive shall not knowingly breach and shall use his reasonable best
efforts to abide by and comply with all securities laws, regulations
and rules and all stock exchange rules and policies as may be
applicable. The Executive acknowledges that his failure to comply with
this section 1.6 will constitute just cause for immediate termination
pursuant to section 3.5 hereof. In his efforts to abide by and comply
with securities laws, regulations and rules and stock exchange rules
and policies, the Executive shall be entitled to rely on advice from
professional advisors and experts.
2. REMUNERATION AND BENEFITS
2.1 BASE SALARY
The Corporation will pay to the Executive, in 24 equal instalments
payable semi-monthly in arrears, an aggregate annual salary of
$225,000.00 (the "Annual Base Salary") or such other amount as may be
agreed upon pursuant to section 2.2, less such deductions which shall
be made by the Corporation in respect of statutory remittances,
including, without limitation, deductions for Income Tax, Canada
Pension Plan premiums and Employment Insurance premiums.
2.2 REVIEW
The Corporation will annually review the performance of the Executive
and the amount of the Annual Base Salary provided hereunder and such
amount determined by the Corporation shall not be less than the
Executive's Annual Base Salary for the immediately preceding year.
2.2.1 On or before January 31st of each year (commencing in 2003),
the Corporation will annually review the performance of the
Executive and the amount of the Annual Base Salary provided
hereunder and such amount determined by the Corporation shall
be retroactive to January 1st, and shall not be less than the
Executive's Annual Base Salary for the immediately preceding
year.
2.2.2 The Annual Base Salary of the Executive commencing January 1,
2003, shall be adjusted upwards to forest industry standards
as set out in the report of Xxxxxx Human Resources Consulting
(the "Xxxxxx Report"), a copy of which is attached as Schedule
"A" to this Agreement.
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2.3 BONUS
The Executive shall be eligible to receive an annual discretionary
bonus based upon the performance of the Executive and that of the
Corporation, which bonus shall be satisfactory to both the Corporation
and the Executive and if not mutually satisfactory, then the amount of
the bonus shall be based on forest industry standards and shall be
decided by Xxxxxx Human Resources Consulting, or someone chosen by them
as a replacement, and whose decision shall be final and binding on both
the Corporation and the Executive.
2.4 BENEFITS
The Executive shall receive the following additional benefits during
the tenure of this Agreement:
2.4.1 Continued participation in the Corporation's benefit program
generally made available to salaried head office employees of
the Corporation;
2.4.2 Continued participation in the Corporation's defined
contribution pension plan and supplemental pension plan;
2.4.3 Entitlement to participate in the incentive stock or other
equity option plan (the "Option Plan") made available to
officers, directors or employees of the Corporation, so that
when and if options are granted thereunder to employees and/or
officers, the Executive shall receive options in an amount
consistent with his position as President and Chief Executive
Officer. Subject to compliance with all applicable securities
laws, regulations, rules and policies and all rules or
policies of all applicable stock exchanges, the right to
receive options pursuant to the Option Plan may, with the
prior consent of the Corporation (not to be unreasonably
withheld), be transferred to and from the Executive and a
family trust established by the Executive. The Executive
acknowledges that neither the Corporation or any of its
employees, officers, agents, associates or affiliates have
provided him with any tax or financial advice in respect of
the foregoing; and
2.4.4 Continued entitlement to an automobile of comparative status
to the one currently provided and continuation of expenses
related to its use.
2.5 VACATION
The Executive shall be entitled each year to six (6) weeks of paid
vacation, prorated for any partial year. Vacation time shall be taken
by the Executive at such times so as to minimize the disruption to the
Business. In the event that any vacation time shall not be taken by the
Executive during any given year at the request of the Corporation, the
Corporation will compensate the Executive for any such unused vacation
within thirty days of the end of the given year. For greater certainty,
the Executive shall not be entitled to carry over any unused vacation
time into any subsequent year or years during the Term without the
prior written approval of the Governance and Compensation Committee. In
the event that the Executive has any unused vacation time upon the
termination of the Executive's employment or at the conclusion of the
Term, the Executive shall be entitled to be compensated for such unused
vacation time.
2.6 EXPENSES
The Corporation further agrees that it will reimburse the Executive for
all reasonable and properly documented expenses related to the
discharge of the Executive's duties under this Agreement.
2.7 INDEMNIFICATION
Subject to any applicable laws respecting indemnification of corporate
officers, the Corporation agrees to indemnify the Executive in any
threatened, pending or completed suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or
in the right of the Corporation) by reason of the fact that the
Executive is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as
a director, officer, employee or agent of another
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corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgements, fines and
amounts paid in settlement actually and reasonably incurred by the
Executive and reasonably approved by the Corporation in connection with
such action, suit or proceeding if the Executive acted in good faith
and in a manner not opposed to the best interests of the Corporation
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the Executive's conduct was unlawful. The
termination of any action, suit or proceeding by judgement, order,
settlement, or conviction, shall not, of itself, create a presumption
that the Executive did not act in good faith and in a manner not
opposed to the best interests of the Corporation and, with respect to
any criminal action or proceeding, had reasonable cause to believe that
the Executive's conduct was unlawful. Expenses incurred in defending or
investigating a threatened or pending action, suit or proceeding shall
be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on
behalf of the Executive to repay such amount if it shall ultimately be
determined that the Executive is not entitled to be indemnified by the
Corporation.
3. TERMINATION OF EMPLOYMENT
3.1 TERMINATION BY EXECUTIVE
The Executive may terminate this Agreement upon giving the Corporation
three months prior written notice of the effective date of his
resignation. On receiving such notice, the Corporation may elect to pay
the Executive in lieu of working the notice period, in which case the
termination will be effective immediately.
3.2 TERMINATION BY THE EMPLOYER
The Corporation may terminate this Agreement at any time, without
cause.
3.3 TERMINATION FOR PERMANENT DISABILITY
The Corporation may terminate this Agreement for permanent disability
of the Executive without notice. "Permanent disability" shall mean any
physical or mental incapacity, disease or affliction, as determined by
a legally qualified medical practitioner selected by the Corporation,
which: (i) prevents the Executive, to a substantial degree, from
performing his obligations hereunder as an executive officer of the
Corporation; and (ii) has existed for either a continuous period of 120
days or a total of 180 days in any period of 365 consecutive days.
3.4 TERMINATION ON DEATH
This Agreement shall automatically terminate without notice upon the
death of the Executive.
3.5 TERMINATION FOR CAUSE
The Corporation may terminate this Agreement for Cause without notice.
"Cause" shall consist of any event or circumstance that would
constitute cause for termination of employment at law or a breach of
section 1.6 hereof.
3.6 COMPENSATION ON TERMINATION
On termination of this Agreement under 3.1, 3.2, 3.3, 3.4, or 3.5, the
Corporation shall pay the Executive (or the Executive's estate if
termination is under 3.4):
3.6.1 an amount equal to twice the Annual Base Salary;
3.6.2 any accrued vacation up to and including for the notice period
in accordance with section 2.5;
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3.6.3 any expense reimbursement amounts accrued to the effective
date of termination in accordance with section 2.6;
3.6.4 a good faith and reasonable estimate of any bonus to which the
Executive would have been entitled for the notice period
pursuant to section 2.3;
3.6.5 any option rights under 2.4.3; and
3.6.6 vehicle entitlement as per 2.4.4 for twenty-four months
following termination.
3.7 FIDUCIARY DUTY
The Executive acknowledges that his is a position of authority and
responsibility with the Corporation and as such he has and will
continue to acquire and develop unique and valuable contacts, skills
and talents during the term of this Agreement. Accordingly, upon
termination of this Agreement, for whatever reason, the Employee agrees
to conduct himself in such manner as will not breach any fiduciary or
other duty he owes to the Corporation.
4. CONFIDENTIALITY AND INTELLECTUAL PROPERTY
4.1 CONFIDENTIALITY
The Executive understands and agrees that, in the performance of the
Executive's obligations under this Agreement, the Executive has
obtained and will obtain further knowledge of Confidential Information
(as defined in section 4.2) relating to the Business, or the affairs of
the Corporation (or any of its subsidiary or affiliated companies). The
Executive agrees that the Executive shall not, without the prior
written consent of the Board, either before or after termination of
this Agreement:
4.1.1 use or disclose any Confidential Information outside of the
Corporation (or any of its subsidiary or affiliated companies)
for any use or purpose other than those of the Business;
4.1.2 publish any article with respect thereto that discloses
Confidential Information; and
4.1.3 except in providing the Services, remove or aid in the removal
from the premises of the Business any Confidential Information
or any property or material relating thereto.
4.2 DEFINITION OF CONFIDENTIAL INFORMATION
In this Agreement, "Confidential Information" means any information or
knowledge including without limitation, any formula, pattern, design,
system, program, device, software, plan, budgets, costs, customer
information, results of operations, process, know how, research,
discovery, strategy, method, idea or compilation of information that:
(i) relates to the Business or the affairs of the Corporation (or any
of its subsidiary or affiliated companies) or to any inventions or
results from its or their research and/or development activities; (ii)
is private or confidential in that it is not generally known or
available to the public; or (iii) gives or would give the Corporation
(or any of its subsidiary or affiliated companies) an opportunity to
obtain an advantage over competitors who do not know of or use it, but
in any event does not include any information which (i) is public
knowledge other than as a result of disclosure by the Executive, or
(ii) is required to be disclosed pursuant to any valid court order, in
which case the Executive shall notify the Corporation immediately of
any such court order in order to enable the Corporation to contest such
order's validity.
4.3 COPYRIGHTS
The Executive assigns to the Corporation all copyrights and similar
rights in all works created by the Executive in whole or in part in the
course of rendering Services hereunder.
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4.4 COMPLIANCE WITH POLICIES
The Executive shall abide by and carry out all policies of the
Corporation placed in effect to establish and protect the Confidential
Information.
4.5 INJUNCTIVE RELIEF
The Executive acknowledges that any unauthorized disclosure or use of
Confidential Information by the Executive may result in material
damages to the Business or the Corporation and consents to the issuance
of an injunction or other equitable remedy to prohibit, prevent or
enjoin unauthorized disclosure or use of Confidential Information by
the Executive.
4.6 SURVIVAL OF OBLIGATION OF CONFIDENCE
The obligation respecting confidentiality set out in this Article 4
shall survive termination of this Agreement for a period of five years
after termination of this Agreement.
5. CONFLICT OF INTEREST
5.1 DISCLOSURE OF CONFLICTS OF INTEREST
The Executive shall promptly, fully and frankly disclose to the
Corporation in writing:
5.1.1 the nature and extent of any interest the Executive, or any of
his Associates, has or may have, directly or indirectly, in
any contract or transaction or proposed contract or
transaction of or with the Corporation or any of its
subsidiaries or the Business;
5.1.2 every office the Executive, or any of his Associates, may hold
or acquire, and every property the Executive or any of his
Associates, may possess or acquire, whereby directly or
indirectly a duty or interest might be created in conflict
with the interests of the Corporation or the Business or the
duties and obligations of the Executive under this Agreement;
and
5.1.3 the nature and extent of any conflict referred to in Paragraph
5.1.2 above.
In this Agreement, the expression "Associate" shall include all those
persons and entities that are included within the definition or meaning
of "associate" as set forth in section 2(1) of the Canada Business
Corporations Act as amended from time to time, and shall also include
the spouse, children, parents, brothers and sisters of the Executive.
5.2 AVOIDANCE OF CONFLICTS OF INTEREST
The Executive shall not enter into any agreement, arrangement or
understanding with any other person or entity that would in any way
conflict or interfere with this Agreement or the duties and obligations
of the Executive under this Agreement or that would otherwise prevent
the Executive from performing the Services hereunder, and the Executive
hereby represents and warrants that neither he nor any of his
Associates has entered into any such agreement, arrangement or
understanding.
6. GENERAL
6.1 INTERPRETATION
If the sense or context of this Agreement so requires, the singular
number only shall include the plural and vice versa and words importing
the masculine gender shall include the feminine and neuter genders and
vice versa and words importing persons shall include individuals,
partnerships, associations, trusts, unincorporated organizations and
corporations and vice versa. In this Agreement "herein", "hereby",
"hereunder", "hereof", "hereto" and words of similar import, refer to
this Agreement as a whole and not to
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any particular section or part of this Agreement. The headings and
captions of sections of this Agreement are inserted for convenience of
reference only and are not to be considered when interpreting this
Agreement. All sums of money set forth in this Agreement are expressed
in Canadian dollars.
6.2 BENEFIT OF AGREEMENT
This Agreement shall enure to the benefit of and be binding upon the
heirs, executors, administrators and legal personal representatives of
the Executive and the successors and assigns of the Corporation.
6.3 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and cancels and supersedes
any prior understandings and agreements between the parties hereto with
respect thereto. There are no representations, warranties, forms,
conditions, undertakings or collateral agreements, express implied or
statutory between the parties other than as expressly set forth in this
Agreement.
6.4 WAIVERS
No waiver of any breach of any term or provision of this Agreement
shall be effective or binding unless made in writing and signed by the
party purporting to give the same and, unless otherwise provided in the
written waiver, shall be limited to the specific breach waived.
6.5 SURVIVAL OF TERMS
The representations, warranties, covenants, agreements, obligations and
liabilities of the Executive under any and all of sections 3.7, 4.1,
4.3, and 5.2 of this Agreement shall survive any expiration or
termination of this Agreement. Any expiration or termination of this
Agreement shall be without prejudice to any rights and obligations of
the parties hereto arising or existing up to the effective date of such
expiration or termination, or any remedies of the parties with respect
thereto.
6.6 ASSIGNMENT
It is hereby agreed that neither party hereto may assign his or its
rights or obligations under this Agreement, in whole or in part.
6.7 SEVERABILITY
If any provision of this Agreement is determined to be invalid or
unenforceable in whole or in part, such invalidity or unenforceability
shall attach only to such provision or part thereof and the remaining
part of such provision and all other provisions hereof shall continue
in full force and effect.
6.8 LEGAL ADVICE
The Executive hereby represents and warrants to the Corporation and
acknowledges and agrees that he had the opportunity to seek, was not
prevented nor discouraged by the Corporation from seeking and did
obtain independent legal advice prior to the execution and delivery of
this Agreement. The Corporation shall pay or reimburse to the Executive
for all reasonable costs and expenses incurred by the Executive in
negotiating the terms of this Agreement.
6.9 NOTICES
Any demand, notice or other communication under this Agreement in
connection herewith shall be sufficiently given:
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6.9.1 by the Corporation to the Executive, if delivered personally
to the Executive, or if delivered or sent by prepaid
registered mail to the Executive, as the case may be, at the
address of the intended recipient shown on the first page of
this Agreement; and
6.9.2 by the Executive to the Corporation, if delivered or sent by
prepaid registered mail to the Chairman of the Board of
Directors or any other individual empowered to receive such
communication by the Board.
Any party may change their address for notices by giving notice in
writing of such change to the other parties hereto as provided above.
Any notice or communication shall be deemed to have been given, if
delivered as aforesaid, when delivered, and if mailed in Canada as
aforesaid, on the fourth business day after the date of mailing.
6.10 FURTHER ASSURANCES
Each party must, from time to time, execute and deliver all such
further documents and instruments and all acts and things as the other
party may reasonably require to effectively carry out or better
evidence or perfect the full intent and meaning of this Agreement.
6.11 LAWS AND COURTS
This Agreement shall be governed and interpreted in accordance with the
laws of Province of British Columbia and the laws of Canada applicable
therein. All disputes arising under this Agreement will be referred to
the courts of the Province of British Columbia which will have
jurisdiction, but not exclusive jurisdiction, and each party hereto
irrevocably submits to the non-exclusive jurisdiction of such courts.
6.12 COPY OF AGREEMENT
The Executive hereby acknowledges receipt of a copy of this Agreement
duly signed by the Corporation.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the day and year first above written
SIGNED, SEALED AND DELIVERED by XXXX XXXXX )
XXXXX in the presence of: )
)
"X. Xxxxxxxxx" ) /s/ "X.X. Xxxxx"
----------------------------------------------------- -------------------------------------------------------
Witness ) XXXX XXXXX
Xxxxx Xxxxxxxxx )
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Address )
305-1475 X. 00xx Xxxxxx )
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)
Xxxxxxxxx, X.X. X0X 0X0 )
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Occupation )
Administrative Secretary
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XXXXX INDUSTRIES LTD.
By: "X.X. Xxxxx"
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Name: /s/ X.X. Xxxxx
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Title: Chairman
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ADDENDUM to the
Employment Agreement made between XXXX XXXXX (the "Executive")
and XXXXX INDUSTRIES LTD. (the "Corporation") dated for reference October 23,
2002.
Paragraph 3.1 is amended by adding the following to the end of this section:
"The Executive agrees not to terminate this Agreement during
the currency of the Company's filing under the CCAA."
Paragraph 3.6 is amended by deleting the reference to "3.5" from this section
and adding the following as paragraph 3.6.7:
"Notwithstanding any other section of this Agreement, the
Executive agrees that he shall have no entitlement to any
payment under 3.6.1, 3.6.4 or 3.6.6 of this section of the
Agreement if he terminates the Agreement pursuant to section
3.1 except pursuant to an agreement which may be subsequently
negotiated between the Executive and the Corporation as a form
of retiring allowance, provided that the Executive retains his
ability to terminate the Agreement on the basis of
constructive dismissal by the Corporation and to seek damages
in lieu of termination pay in those circumstances."
IN WITNESS WHEREOF this Addendum has been executed by the parties hereto as of
the 23rd day of October, 2002.
SIGNED, SEALED AND DELIVERED by XXXX XXXXX in the )
presence of: )
)
"Xxxxx Xxxx" ) "X.X. Xxxxx"
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Witness ) XXXX XXXXX
Barry Y.F. Dong )
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Address )
Barrister & Solicitor )
Xxxxx 0000 - 0000 Xxxxxxxx Xx.
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X.X. Xxx 00000 )
Xxxxxxxxx, X.X. X0X 0X0 )
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Occupation )
XXXXX INDUSTRIES LTD.
Per: "X.X. Xxxxx"
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Authorized Signatory
